Assignment 1: Consumer Surplus
“Consumer surplus” represents the aberration amid what a customer is accommodating to pay for a acceptable or account and the amount that they absolutely pay.
In alternative words, the abstraction of customer surplus indicates how abundant consumers accretion from arresting appurtenances and casework at a defined price.
Now let’s accede the case of a “consumer deficit” or the accident represented by consumers who abide at the adverse end of the appeal curve.
These are those bodies who cannot allow to absorb any appurtenances or casework at the defined price.
To abode such a customer loss, brainstorm that you are now tasked with arty a “surplus tax” on consumers through the accession of an alone sales tax which will be added to the bazaar amount of assertive appurtenances and services. The gain from such a tax will be acclimated to atone an according cardinal of those consumers at the basal of the appeal curve, thereby, giving them the befalling to absorb such appurtenances and casework which they contrarily would not accept been able to acquirement at the defined price.
What would be the assorted after-effects of this tax on both burning as able-bodied as production?
Order a unique copy of this paper